Oil claws back after plunge, sterling rises on Brexit deal

NEW YORK (Reuters) - Oil prices bounced up on Wednesday, as hopes for output cuts fueled a partial rebound from the previous session’s steep decline, and the euro and sterling gained as British Prime Minister Theresa May obtained her cabinet’s backing for her Brexit deal.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., November 12, 2018. REUTERS/Brendan McDermid

A gauge of global stock markets fell for a fifth straight session, following a volatile session on Wall Street that left major U.S. indexes well in the red.

U.S. natural gas futures surged 17.9 percent and are at their highest levels since the polar vortex winter of 2013-14 on forecasts for frigid weather. Oil rose after 12 straight days of losses on the prospect that OPEC and allied producers will cut output at a meeting next month.

U.S. crude CLc1 settled up 1 percent at $56.25 per barrel and Brent LCOc1 settled at $66.12 a barrel, up 1 percent. Benchmark Brent has fallen more than 20 percent since early October on concerns about excess supply and slowing demand.

“Maybe some of the fears of extra supplies and reduced demand have finally been priced into the market, but I wouldn’t say that a bottom has set in yet,” said Gene McGillian, vice president of market research for Tradition Energy in Stamford, Connecticut.

Major U.S. stock indexes slid but ended off of session lows.

The Dow Jones Industrial Average .DJI fell 205.99 points, or 0.81 percent, to 25,080.5, the S&P 500 .SPX lost 20.6 points, or 0.76 percent, to 2,701.58 and the Nasdaq Composite .IXIC dropped 64.48 points, or 0.9 percent, to 7,136.39.

Financial shares .SPSY dropped 1.4 percent, after Representative Maxine Waters, poised to head the U.S. House of Representatives Financial Services Committee in January, made clear she intends to push for stricter rules on the financial sector.

The technology sector .SPLRCT fell 1.3 percent, continuing its decline since October. Shares of Apple AAPL.O, the largest U.S. company by market value, dropped for a fifth straight session.

“Once you question the largest factor in the market, everything becomes a jump ball,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

The pan-European STOXX 600 index .STOXX lost 0.60 percent.

European shares hit their lowest in two weeks in a broad-based sell-off across oil, mining, technology and banking stocks amid renewed worries about a global economic slowdown and Italy’s budget crisis.

MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.43 percent, its fifth straight daily decline.

The euro and sterling gained as May obtained backing from her cabinet on her Brexit deal, which she now has to convince parliament to approve.

Sterling GBP= was last trading at $1.2999, up 0.22 percent on the day, with the euro EUR= up 0.23 percent to $1.1315.

The dollar index .DXY, which measures the greenback against a basket of currencies, fell 0.35 percent.

U.S. Treasury yields fell as investors fretted that renewed weakness on Wall Street could signal problems in the world’s largest economy.

Benchmark 10-year Treasury notes US10YT=RR last rose 5/32 in price to yield 3.1268 percent, from 3.145 percent late on Tuesday.

Additional reporting by Devika Krishna Kumar, Richard Leong, April Joyner and Gertrude Chavez-Dreyfuss in New York, Pete Schroeder in Washington; Editing by Tom Brown, Dan Grebler and David Gregorio